EURUSD, H4
Fed Chair Yellen repeated the Fed will continue raising rates cautiously, in her prepared testimony before the Senate Banking Committee. She’s optimistic on further growth but noted there are still considerable uncertainties over the outlook. The Fed is monitoring the job market carefully to see whether the weakness in the May report was transitory, she said, and added it is important not to react to one or two reports. On the positive front, she said spending has picked up smartly while housing is recovering. But she cautioned that the Fed can’t dismiss the slow productivity growth. Brexit could have significant economic repercussions. The cautiously optimistic outlook is as expected.
Yellen said the Fed is relying less on forward guidance than during the financial crisis credibility. The Fed still issues quarterly projections, which Yellen believes are helpful for the public to understand the path of the economy. The Fed Chair stressed again, however, that the Fed is not on a preset course. Economic developments have been mixed for some time, with some sectors remaining slow due to the recession in the energy sector and as a result of the stronger dollar, while others, such as the labor market, have performed well, at least until recently.
Key pivot and resistance sits at 1.1300 and 1.1350 in the 4h time frame with support at 1.1240, 1.1220 and 1.1180.
Janne Muta
Chief Market Analyst
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Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
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